Although the sea may be perceived as a barrier, in ancient times, when no infrastructure existed on land, it was actually the medium which connected one country to another. Travelling on the sea had its own risks and so eventually the idea of insuring a ship and its cargo developed. Traces of the first arrangements between merchants date back to the Roman Period, starting from contracts of sea loans and evolving through the centuries into more complex marine insurances.

Along their history, the Maltese Islands often formed part of important trade routes and therefore local merchants were soon involved in this sector of underwriting risks. A wealth of information related to this aspect is available in old documents which show the development of insurance that was offered against particular risks on the sea. Nonetheless, till now, the origins and progress of marine insurance in Malta have been given little attention.

A visit to the Notarial Archives in Valletta where I met historian Dr Joan Abela introduced me to this interesting theme. Always ready to divulge enticing narratives from the valuable sources of these archives, Abela prepared for me a distinguished selection of thick manuscripts in order to help me explore the fine details available within.

“In antiquity, before marine insurance originated, a sea loan was the only means of transferring risks in maritime transport from the shipper to another person. This consisted of two partners, a traveling and a sedentary one, who pooled their capital in order to invest and share the risk together. With such an agreement, the travelling partner would have more money in hand to work with, whereas the sedentary one would be able to make a profit while staying on land to continue with his work and at the same time avoid the perils that existed out at sea,” explained Abela.

By the Late Middle Ages, as Italian merchants, particularly from Genoa, continued to experiment on these issues of securing vessels and their cargo, marine insurance gradually began to replace this type of agreement.

“Since marine insurance was still in its early stages of development, contracts did not adopt a uniform pattern, but varied considerably according to the exigencies of the contractors. Insurance contracts were usually categorized as Securitas by the notary, and were generally divided into two parts.”

“The first section listed the insurers’ names and the guaranteed premium which was calculated according to the routes, the prevailing conditions along these routes, the type of cargo, and also the type of ship being used. It also covered the kind of information which was regarded as essential for such a contract, that is, the name of the persons insured, specific details regarding the ship which was to undertake the venture, and other specifications regarding the merchandise and its destination. The second part of the contract usually listed the obligations of the insurers, the rights of those insured, and the method of payment.”

Abela guided me through the Latin elegant black ink scripture which dated to centuries ago. Interestingly, at the beginning of some contracts, prior to the insertion of the usual stereotyped clauses, notaries included an invocation of God’s blessing for a safe trip.

“Divinity was also cited in other parts of the contracts,” revealed Abela. “In fact, the listing of the perils was often preceded by the phrase che Dio non voglia.”

Abela noted also that although at the time, mariners had a great devotion for the Virgin Mary which is evident from ex-voto paintings, Her name and also the names of saints were not usually mentioned when appealing for such spiritual protection in between legal phrases. This contrasted with the names given to ships that were often named after the Madonna and various saints.

“Indeed these manuscripts can shed light on various subject matters. Amongst the wide data available, one can note the different vessels that were used during the different periods, the names of these ships, the ports to which they travelled, the type of cargo that was carried, and the amount of money which was being insured on it.”

“An insurance contract which was concluded on 4 April 1536 stated that the insurance policy covered a shipment of 18 cantari of spun cotton that was going to be loaded from Birgu and shipped to Licata on the fusta of Giacomo Bonnichi. This fusta was to be captained by Paolo Xuejl or by any other captain appointed in his stead, and was secured to travel to any port which may have been deemed necessary for the purpose of the expedition.”

Interestingly, a clause in the above contract stated that although being insured, the captain was expected to act prudently and to behave as if he was not being offered this protection, in order not to compromise the safety of the merchandise.

“Should any damage or loss occur to the insured goods, the insurers were usually expected to pay the amount insured without any objection within four months from the incident. Yet as we can see from some documents, such as the petition that was put forward by Nob. Giacomo Bonichi against Mag. Pietro Ros and Giovanni Exatopolo in relation to a contract enrolled in the acts of notary Vincenzo Bonaventura de Bonetiis in 1560, the clients were not always satisfied with the way in which claims were met.”

Abela pointed out to a most interesting contract which referred to an insurance of a consigment of apothecary products for the Order’s Infirmary. The list of products acted almost as a showcase of those ingredients which the Hospitallers used in order to produce the required medicine for their patients.

“Those who succeeded to establish themselves in this sector had to have great entrepreneurial skills since this business was still in its infancy and there were lots of risks which one had to deal with. Antonio Habell and Giuliano Lombardo were two of the earliest local entrepreneurs who besides being merchants and traders, they also offered marine insurance services, as may be noted in an insurance contract which they endorsed in respect of the safe consignment of a shipment of timber from Licata in 1558.”

Abela lead me to the book Trade and Port Activity in Malta 1750-1800 (2000) by John Debono where one can find detailed research related to aspects of marine insurance.

“As Debono elucidates, marine risks involved were numerous and included: inconsistency in the weather, the questionable conduct of a crew which was generally poorly and irregularly paid and usually comprised men who could not find work ashore, plundering or being taken as a slave by pirates, the unreliability of basic sea charts and portolani which only showed the depth of the water, and the perils that war brought with it.”

This study underlines also that initially, undewriters operated on an individual basis up to circa 1771, and those notaries which succeeded did very well financially. From an examination of insurance policies between September 1754 and August 1755 drawn up by notary Agostino Marchese, who at the time was most renowned with underwriters and insured, reveals that no less than 109 marine underwiters during that period insured a total sum of 686, 385 scudi against marine risks. However, by the 1770s individual undewriters were being replaced by insurance firms and in 1771, we see the establishment of the first insurance company in Malta.

A few years later, the Maltese Islands were in a state of turmoil as they were briefly occupied by the French and this led to a total collapse of the whole local insurance system. A new chapter in this sector initiated with the beginning of the British rule.

(This article was published in the Shipping and Logistics Supplement which was issued with the Times of Malta on 30th March 2016)